An additional 160 billion euros: the new government can count on more money

160 billion euros in addition
New government can count on more money

During the election campaign, the SPD, FDP and the Greens made expensive promises that they are currently struggling to implement in the coalition negotiations. That should be a little easier. According to a report, the new tax estimate assumes high additional income in the coming years.

The new federal government will probably have more leeway in the coming years than previously assumed. The latest tax estimate comes from a report by the “Handelsblatt” to the result that the federal, state and local governments can expect 160 billion euros more tax income for the period from 2021 to 2025 than the current financial planning is based on. The federal government will account for additional income of six to eight billion euros this year and more than ten billion euros in each of the coming years.

The future government’s financial leeway will grow even more. According to the report, the Ministry of Finance made a cash fall in parallel to the tax estimate, which reveals further additional income and under-spending. Accordingly, the future government coalition, which will probably consist of the traffic light parties SPD, Greens and FDP, could distribute 10 to 15 billion euros more per year than previously assumed. This news should simplify the current coalition negotiations, in which, among other things, the scarce money for the expensive election promises of the parties has to be distributed.

According to the “Handelsblatt” information, the reason for the additional income is primarily the expected economic upturn. But this year too, despite the current faltering recovery after the Corona crisis, income is likely to be higher than recently expected. The tax authorities are also benefiting from the sharp rise in the price of CO2 certificates, which is likely to hit a low double-digit billion figure by 2025. Officially, the currently managing finance minister and Federal Chancellor-designate Olaf Scholz wants to present the tax estimate next Thursday.

Despite the additional income, it is still unclear how the Ampel coalitionists want to finance their huge investment plans for climate protection, among other things. On the one hand, taxes should not be raised, but on the other hand the debt brake, which will again severely limit the deficit from 2023, should not be touched.

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